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EXHIBIT 10
CREDIT AGREEMENT
BETWEEN
COEUR D'ALENE MINES CORPORATION
AND
SEATTLE-FIRST NATIONAL BANK
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Additional Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.3 Available Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.4 Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.5 Capitalized Lease Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.6 Cash Equivalent Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.7 Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.8 Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.9 Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.10 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.12 GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.13 Guarantor(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.14 Hazardous Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.15 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.16 Initial Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.17 Letter(s) of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.18 Letter of Credit Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.19 Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.20 Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.21 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.22 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
----
1.23 Prime Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.24 Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.25 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.26 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.27 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.28 Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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ARTICLE 2
LETTER OF CREDIT . . . . . . . . . . . . . . 5
2.1 Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------
2.2 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----
2.3 Yield Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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ARTICLE 3
GUARANTIES . . . . . . . . . . . . . . . 6
ARTICLE 4
CONDITIONS OF LENDING . . . . . . . . . . . . 6
4.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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4.2 Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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4.3 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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4.4 Termination of Prior Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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4.5 Proof of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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4.6 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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4.7 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 7
5.1 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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5.2 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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5.3 No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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5.4 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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5.5 Liens and Encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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5.6 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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5.7 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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5.8 Employee Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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5.9 Misrepresentations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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5.10 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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5.11 No Burdensome Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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ARTICLE 6
AFFIRMATIVE COVENANTS . . . . . . . . . . . . 9
6.1 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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6.2 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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6.3 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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6.4 Debt Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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6.5 Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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6.6 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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6.7 Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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6.8 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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6.9 Ownership of Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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6.10 Access to Premises and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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6.11 Notice of Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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6.12 Payment of Debts and Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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6.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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6.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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6.15 Additional Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE 7
EVENTS AND CONSEQUENCES OF DEFAULT . . . . . . . . . 13
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(a) Nonpayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(b) Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(c) ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(d) Failure to Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(e) Defaults on Other Obligations. . . . . . . . . . . . . . . . . . . . . . . . 13
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(f) Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(g) Loss, Destruction, or Condemnation of Property . . . . . . . . . . . . . . . 13
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(h) Attachment Proceedings and Insolvency. . . . . . . . . . . . . . . . . . . . 14
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(i) Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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(j) Government Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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7.2 Remedies Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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7.3 Alleged Default by Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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ARTICLE 8
MISCELLANEOUS . . . . . . . . . . . . . . 15
8.1 Manner of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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8.3 Documentation and Administration Expenses . . . . . . . . . . . . . . . . . . . . . . 16
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8.4 Collection Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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8.5 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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8.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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8.7 Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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8.8 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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8.9 Mandatory Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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8.10 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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8.11 Termination of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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EXHIBITS:
Exhibit A -- Form of CFO Certificate
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made between Coeur d'Alene
Mines Corporation, an Idaho corporation ("Borrower"), and Seattle-First
National Bank, a national banking association (including its successors and/or
assigns, "Bank"). The parties agree as follows:
ARTICLE 1
DEFINITIONS
All terms defined below shall have the meaning indicated. All
references in this Agreement to:
(a) "dollars" or "$" shall mean U.S. dollars. Any item
denominated in a currency other than U.S. dollars, shall be converted
into U.S. Dollars at Bank's spot rate of exchange between such
currency and U.S. dollars, as quoted on the date of calculation.;
(b) "Article," "Section," or "Subsection" shall mean
articles, sections, and subsections of this Agreement, unless
otherwise indicated;
(c) terms defined in the Washington version of the
Uniform Commercial Code, R.C.W. Section 62A.9-101, et seq. ("UCC"),
and not otherwise defined in this Agreement, shall have the meaning
given in the UCC; and
(d) an accounting term not otherwise defined in this
Agreement shall have the meaning assigned to it under GAAP.
1.1 Additional Guarantors shall have the meaning given in Section
6.14.
1.2 Affiliate of a Person shall mean any other Person which,
directly or indirectly, controls or is controlled by or under common control
with such Person (excluding any trustee under, or any committee with
responsibility for administering, any Plan). A Person shall be deemed to be
"controlled by" any other Person if such other Person possesses, directly or
indirectly, power:
(a) to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of
directors or managing general partners of such Person; and
(b) to direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
1.3 Available Amount shall mean at any time the amount of the
Credit Limit minus the face amount of all Letters of Credit outstanding.
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1.4 Business Day shall mean any day other than a Saturday, Sunday,
or other day on which commercial banks in Seattle, Washington, are authorized
or required by law to close.
1.5 Capitalized Lease Liabilities shall mean all monetary
obligations of Borrower or any Subsidiary under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as capitalized
leases, and the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP, and the stated maturity thereof
shall be the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be terminated by
the lessee without payment of a penalty.
1.6 Cash Equivalent Investment shall mean, at any date:
(a) any evidence of Indebtedness, maturing not more than
one year after such date, issued or guaranteed by the United States
Government;
(b) commercial paper, maturing not more than nine months
from the date of issue, which is issued by Bank or any other
corporation (other than an Affiliate of Borrower or of any Guarantor)
organized under the laws of any State of the United States or of the
District of Columbia and rated A-1 by Standard & Poor's Corporation or
P-1 by Moody's Investors Service, Inc.;
(c) any certificate of deposit or bankers acceptance,
maturing not more than one year after such date, which is issued by
Bank or any other commercial banking institution that is a member of
the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than US$500,000,000 (for purposes of
this Section, an "Approved Bank"); or
(d) any repurchase agreement entered into with Bank or
any Approved Bank which repurchase agreement is:
(i) secured by a fully perfected security
interest in any obligation of the type described in any of
clauses (a) through (c) above, and
(ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of
the repurchase obligation of Bank or such Approved Bank.
1.7 Cash Equivalents shall mean all of Borrower's consolidated
cash, Cash Equivalent Investments and all debt and equity marketable security
investments,
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stated at the lower of cost or market, made in compliance with Borrower's board
of directors-adopted, Bank-reviewed investment policy.
1.8 Current Assets shall mean all consolidated assets of Borrower,
on a GAAP basis, which may be properly classified as current assets in
accordance with GAAP.
1.9 Current Liabilities shall mean all consolidated indebtedness
of Borrower, on a GAAP basis, maturing on demand or within a period of one year
from the date when Borrower's current liabilities are determined and which may
be properly classified as current liabilities in accordance with GAAP.
1.10 Environmental Laws shall mean all applicable federal, state,
or local statutes, laws, ordinances, codes, rules, regulations, and guidelines
(including consent decrees and administrative orders) relating to public health
and safety and protection of the environment issued in the U.S. by any federal,
state, or local authority or in any other jurisdiction by any similar
governmental or other authority.
1.11 ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended.
1.12 GAAP shall mean generally accepted accounting principles as in
effect from time to time in the United States and as consistently applied by
Borrower.
1.13 Guarantor(s) shall mean the Initial Guarantors and each
Additional Guarantor.
1.14 Hazardous Material shall mean any substance or material
defined or designated as hazardous or toxic wastes, hazardous or toxic
material, a hazardous, toxic or radioactive substance or other similar term by
any applicable federal, state, or local statute, regulation, or ordinance now
or hereafter in effect.
1.15 Indebtedness shall mean, as to any Person, (a) all
consolidated obligations, on a GAAP basis, included in the liability section of
a balance sheet of Borrower, and (b) all obligations of such Person which
should be, in accordance with GAAP, recorded as Capitalized Lease Liabilities.
1.16 Initial Guarantors shall mean each of the following
corporations, jointly and severally, Coeur Alaska, Inc., a Delaware
corporation, CDE Chilean Mining Corporation, a Delaware corporation, Callahan
Mining Corporation, an Arizona corporation, Coeur Gold New Zealand, Limited., a
New Zealand corporation,
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Coeur New Zealand, Inc., a Delaware corporation, and Coeur-Rochester, Inc., a
Delaware corporation.
1.17 Letter(s) of Credit shall have the meaning assigned in
Article 2.
1.18 Letter of Credit Balance shall mean the aggregate outstanding
liability of Bank at any given time under all combined Letters of Credit.
1.19 Loan Documents shall mean collectively this Agreement, the L/C
Agreements, and all other documents, instruments, and agreements now or later
executed in connection with this Agreement.
1.20 Obligations shall mean Borrower's obligation to reimburse Bank
for all amounts drawn under the Letters of Credit, and all fees, costs,
expenses, and indemnifications due to Bank under this Agreement.
1.21 Person shall mean any individual, partnership, corporation,
business trust, unincorporated organization, joint venture, or any governmental
entity, department, agency, or political subdivision.
1.22 Plan shall mean any employee benefit plan or other plan
maintained for Borrower's employees and covered by Title IV of ERISA, excluding
any plan created or operated by or for any labor union.
1.23 Prime Rate shall mean the floating commercial loan reference
rate of Bank, publicly announced from time to time as its "prime rate"
(calculated on the basis of actual number of days elapsed over a year of 360
days), with any change in the Prime Rate to be effective on the date the "prime
rate" changes.
1.24 Significant Subsidiary shall mean, at any date, each
Subsidiary that:
(a) accounted for at least 5% of consolidated revenues of
Borrower and its Subsidiaries or 5% of consolidated earnings of
Borrower and its Subsidiaries before interest and taxes, in each case
for the fiscal quarter of Borrower most recently ended on or prior to
such date; or
(b) has assets which represent at least 5% of the
consolidated assets of Borrower and its Subsidiaries as of the last
day of the last fiscal quarter of Borrower most recently ended on or
prior to such date;
all of which shall be as reflected on the financial statements of Borrower for
the period, or as of the date, in question.
1.25 Subordinated Debt shall mean all Indebtedness of Borrower
which is subordinated to the repayment of the Obligations on terms, and
pursuant to documentation, in form and substance satisfactory to Bank, as
necessary to assure subordination.
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1.26 Subsidiary shall mean, with respect to any Person, any
corporation of which more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person. Except as otherwise
indicated herein, references to Subsidiaries shall refer to Subsidiaries of
Borrower.
1.27 Tangible Net Worth shall mean the consolidated net worth of
Borrower and its Subsidiaries after subtracting therefrom the aggregate amount
of any intangible assets of Borrower and its Subsidiaries including goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks, and brand names.
1.28 Termination Date shall mean July 1, 1997, or such earlier date
upon which Bank's commitment to lend is terminated pursuant to Subsection
7.2(a).
ARTICLE 2
LETTER OF CREDIT
2.1 Issuance. Upon Borrower's execution of Bank's standard form
Application and Agreement for Standby Credit ("L/C Agreement"), and a statement
of purpose for the letter of credit to be issued, Bank shall issue for
Borrower's account standby letters of credit (together with all letters of
credit issued by Bank for Borrower's account and outstanding prior to the date
of this Agreement, "Letter(s) of Credit") in amounts not to exceed $10,000,000
in the aggregate. Each Letter of Credit shall have a maximum tenor of 360
days, and if "evergreen" shall be cancelable by Bank within 60 days of each
anniversary date. If there is a draw under a Letter of Credit, Borrower shall
on demand immediately reimburse Bank for the amount of the draw, together with
interest on the amount drawn, from the date of draw until paid, at a floating
rate equal to the Prime Rate plus 2% per annum. Bank shall in addition have
all rights provided in the L/C Agreement. Any default in an L/C Agreement
shall be a Default.
2.2 Fees. Borrower shall pay to Bank in advance, upon issuance of
each Letter of Credit and on each anniversary of such issuance, an annual fee
of 1.25% per annum on the outstanding balance of the Letter of Credit on the
date payment is due. Borrower shall additionally, on demand, pay transaction
fees according to Bank's then-outstanding standard fee schedule on all drafts,
transfers,
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extensions, and other transactions in regard to the Letters of Credit, and
reimburse Bank for all out-of-pocket costs, legal fees, and expenses.
2.3 Yield Indemnity. If any law or regulation imposes or
increases any reserve, special deposit, or similar requirement against letters
of credit issued by Bank or subjects Bank to any tax, charge, fee, deduction,
or withholding of any kind in regard to the Letters of Credit, Borrower shall
promptly on demand indemnify Bank for any such increased costs, taxes, or
charges (other than taxes based on Bank's gross or net income).
ARTICLE 3
GUARANTIES
The Obligations shall be absolutely and unconditionally guaranteed by
the Initial Guarantors and the Additional Guarantors, jointly and severally, in
form satisfactory to Bank. Borrower authorizes Bank to release to any present
or future guarantor all information the Bank possesses concerning Borrower or
any loans, credits, or other financial accommodations made to Borrower by Bank.
ARTICLE 4
CONDITIONS OF LENDING
Bank's obligation to issue the initial Letter of Credit is subject to
the conditions precedent listed in Sections 4.1 through 4.5, and to issue
subsequent Letters of Credit is subject to the conditions precedent listed in
Sections 4.6 and 4.7, unless waived by Bank in writing:
4.1 Authorization. Borrower shall have delivered to Bank a
certified copy of the resolution of Borrower's board of directors authorizing
the transactions contemplated by this Agreement and the execution, delivery,
and performance of all Loan Documents, together with appropriate certificates
of incumbency. Each corporate guarantor shall have delivered to Bank a
certified copy of a resolution of such guarantor's board of directors,
satisfactory in form to Bank, authorizing its guaranty.
4.2 Documentation. Borrower shall have executed and delivered to
Bank all documents to reflect the existence of the Obligations.
4.3 Guaranties. Each guarantor shall have executed and delivered
its guaranty to Bank, and each such guaranty shall remain in full force and
effect.
4.4 Termination of Prior Facility. Borrower shall have
terminated, and shall have no further letters of credit or advances outstanding
under, the $38,000,000 credit facility evidenced by the Amended and Restated
Loan Agreement
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dated June 17, 1993, among Borrower, various banks, Bank as "Issuing Bank," and
N.M. Rothschild & Sons Limited as "Agent."
4.5 Proof of Insurance. Proof of insurance as required by Section
6.14 has been provided to Bank.
4.6 Representations and Warranties. The representations and
warranties made by Borrower in the Loan Documents and in any certificate,
document, or financial statement furnished at any time shall continue to be
true and correct, except to the extent that such representations and warranties
expressly relate to an earlier date.
4.7 Compliance. No Default or other event which, upon notice or
lapse of time or both would constitute a Default, shall have occurred and be
continuing, or shall exist after giving effect to the advance of credit to be
made.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
To induce Bank to enter into this Agreement, Borrower represents,
warrants, and covenants to Bank as follows:
5.1 Existence. Borrower is in good standing as a corporation
under the laws of the state of its incorporation, has the power, authority, and
legal right to own and operate its property or lease the property it operates
and to conduct its current business; and is qualified to do business and is in
good standing in all other jurisdictions where the ownership, lease, or
operation of its property or the conduct of its business requires such
qualification.
5.2 Enforceability. The Loan Documents, when executed and
delivered by Borrower, shall be enforceable against Borrower in accordance with
their respective terms.
5.3 No Legal Bar. The execution, delivery, and performance by
Borrower of the Loan Documents, and the use of the loan proceeds, shall not
violate any existing law or regulation applicable to Borrower; any ruling
applicable to Borrower of any court, arbitrator, or governmental agency or body
of any kind; Borrower's articles of incorporation or bylaws; any security
issued by Borrower; or any mortgage, indenture, lease, contract, undertaking,
or other agreement to which Borrower is a party or by which Borrower or any of
its property may be bound.
5.4 Financial Information. By submitting each of the financial
statements required by Subsection 6.6(a) and 6.6(b), Borrower is deemed to
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11
represent and warrant that: (a) such statement is complete and correct and
fairly presents the financial condition of Borrower as of the date of such
statement; (b) such statement discloses all liabilities of Borrower that are
required to be reflected or reserved against under GAAP, whether liquidated or
unliquidated, fixed or contingent; and (c) such statement has been prepared in
accordance with GAAP. As of this date, there has been no adverse change in
Borrower's financial condition since preparation of the last such financial
statements delivered to Bank which would materially impair Borrower's ability
to repay the Obligations.
5.5 Liens and Encumbrances. Borrower and each Subsidiary has
sufficient title to each of its assets in order to conduct its respective
business as presently conducted and as contemplated to be conducted; all of the
leases, subleases, licenses, claims, rights, concessions, and agreements
material to the business of Borrower or any Subsidiary, and under which
Borrower or any Subsidiary holds any properties, are in full force and effect
and neither Borrower nor any Subsidiary has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of Borrower or
any Subsidiary under any such lease, sublease, license, claim, concession, or
agreement, or affecting or questioning the rights of Borrower or such
Subsidiary to the continued possession of the premises under any such lease,
sublease, license, claim, concession, or agreement.
5.6 Litigation. Except as disclosed in writing to Bank, there is
no threatened (to Borrower's knowledge) or pending litigation, investigation,
arbitration, or administrative action which may materially adversely affect
Borrower's business, property, operations, or financial condition.
5.7 Payment of Taxes. Borrower has filed or caused to be filed
all tax returns when required to be filed; and has paid all taxes, assessments,
fees, licenses, excise taxes, franchise taxes, governmental liens, penalties,
and other charges levied or assessed against Borrower or any of its property
imposed on it by any governmental authority, agency, or instrumentality that
are due and payable (other than those returns or payments of which the amount,
enforceability, or validity are contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP are
provided on Borrower's books).
5.8 Employee Benefit Plan. Borrower is in compliance in all
respects with the provisions of ERISA and the regulations and published
interpretations thereunder. Borrower has not engaged in any acts or omissions
which would make
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12
Borrower liable to the Plan, to any of its participants, or to the Internal
Revenue Service, under ERISA.
5.9 Misrepresentations. No information, exhibits, data, or
reports furnished by Borrower or delivered to Bank in connection with
Borrower's application for credit misstates any material fact, or omits any
fact necessary to make such information, exhibits, data, or reports not
misleading.
5.10 No Default. Borrower is not in default in any Loan Document,
or in any contract, agreement, or instrument to which it is a party.
5.11 No Burdensome Restrictions. No contract or other instrument
to which Borrower is a party, or order, award, or decree of any court,
arbitrator, or governmental agency, materially impairs Borrower's ability to
repay the Obligations.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as this Agreement shall remain in effect, or any liability
exists under the Loan Documents, Borrower shall:
6.1 Use of Proceeds. Use the Letters of Credit to back
reclamation and surety bonds, primarily for the Golden Cross Mine in New
Zealand, and for other general corporate purposes in the ordinary course of
Borrower's business.
6.2 Tangible Net Worth. Maintain a Tangible Net Worth of not less
than $150,000,000 measured semiannually as of the second quarter end and the
fiscal year end.
6.3 Current Ratio. Maintain a ratio of Current Assets to Current
Liabilities of not less than 2.0 to 1, measured semiannually as of the second
quarter end and the fiscal year end.
6.4 Debt Ratio. Maintain a ratio of Indebtedness to Tangible Net
Worth of not more than 2.0 to 1, measured semiannually as of the second quarter
end and the fiscal year end.
6.5 Cash Collateral. Fully cash-collateralize all outstanding
Letters of Credit by placing immediately available funds in a
non-interest-bearing bank control account at Bank, pledged to Bank, if at any
time Borrower's Cash Equivalents becomes, or would become, as a result of any
contemplated transaction, less than $50,000,000, such collateralization to be
effected prior to consummation of such transaction.
6.6 Financial Information. Maintain a standard system of
accounting in accordance with GAAP and furnish to Bank the following:
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13
(a) Quarterly Financial Statements. As soon as available
and, in any event, within 60 days after the end of each fiscal quarter
of each fiscal year, a copy of the consolidated statement of
operations of Borrower for the quarter and for the current fiscal year
through such quarter, and for each such quarter a copy of the
consolidated balance sheet, consolidated statement of shareholders'
equity, and consolidated statement of cash flow of Borrower as of the
end of such quarter, setting forth, in each case, in comparative form,
figures for the corresponding period of the preceding fiscal year, all
in reasonable detail and satisfactory in scope to Bank, prepared by
the chief financial officer of Borrower, and in form and substance
satisfactory to Bank;
(b) Annual Financial Statements. As soon as available
and, in any event, within 90 days after the end of each fiscal year, a
copy of the consolidated balance sheet, consolidated statement of
operations, consolidated statement of shareholders' equity, and
consolidated statement of cash flow of Borrower for such year, setting
forth in each case, in comparative form, corresponding figures from
the preceding annual statements, each audited by Ernst and Young or
one of the other "Big 6" independent certified public accounting
firms, certifying that such statement is complete and correct, fairly
presents without qualification the financial condition of Borrower for
such period, is prepared in accordance with GAAP, and has been audited
in conformity with generally accepted auditing standards;
(c) Other Certificates. By February 1 and August 1 of
each year, a certificate of the chief financial officer of Borrower,
in the form of Exhibit A attached, as to the semiannual period most
recently ended; and
(d) Additional Financial Information. As soon as
available and, in any event, within ten days after request, such other
data, information, or documentation as Bank may reasonably request.
6.7 Maintenance of Existence. Preserve and maintain its
existence, powers, and privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in each jurisdiction in which its presence is
necessary or desirable in view of its business, operations, or ownership of its
property. Borrower shall also maintain and preserve all of its property which
is necessary or useful in the proper course of its business, in good working
order and condition, ordinary wear and tear excepted.
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14
6.8 Books and Records. Keep accurate and complete books,
accounts, and records in which complete entries shall be made in accordance
with GAAP, reflecting all financial transactions of Borrower.
6.9 Ownership of Guarantors. Continue to own and hold, directly
or indirectly, and free and clear of all liens or other encumbrances, all of
the outstanding shares of capital stock of each Guarantor.
6.10 Access to Premises and Records. At all reasonable times and
as often as Bank may reasonably request, permit any authorized representative
designated by Bank to have access to the premises, property, and financial
records of Borrower, including all records relating to the finances,
operations, and procedures of Borrower, and to make copies of or abstracts from
such records.
6.11 Notice of Events. Furnish Bank prompt written notice of:
(a) Proceedings. Any proceeding instituted by or against
Borrower in any court or before any commission or regulatory body, or
any proceeding threatened against it in writing by any governmental
agency which if adversely determined would have a material adverse
effect on Borrower's business, property, or financial condition, or
where the amount involved is $1,000,000 or more and not covered by
insurance;
(b) Material Development. Any material development in
any such proceeding referred to in Subsection 6.11(a);
(c) Defaults. Any action, event, or condition which is
or, with notice or lapse of time or both, would constitute a Default,
or a default under any other agreement to which Borrower is a party;
and
(d) Adverse Effect. Any other action, event, or
condition of any nature which could result in a material adverse
effect on the business, property, or financial condition of Borrower.
6.12 Payment of Debts and Taxes. Pay all Debt and perform all
obligations promptly and in accordance with their terms, and pay and discharge
promptly all taxes, assessments, and governmental charges or levies imposed
upon Borrower, its property, or revenues prior to the date on which penalties
attach thereto, as well as all lawful claims for labor, material, supplies, or
otherwise which, if unpaid, might become a lien or charge upon Borrower's
property. Borrower shall not, however, be required to pay or discharge any
such tax, assessment, charge, levy, or claim so long as its enforceability,
amount, or validity is contested in good faith by appropriate proceedings.
6.13 Environmental Matters.
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15
(a) Use and operate all of its facilities and properties
in material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses, and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) immediately notify Bank and provide copies upon
receipt of all written material claims, complaints, notices, or
inquiries relating to the condition of its facilities and properties
or compliance with Environmental Laws; and
(c) provide such information and certifications which
Bank may reasonably request from time to time to evidence compliance
with this Section.
6.14 Insurance. Maintain commercially adequate levels of coverage
with financially sound and reputable insurers, including, without limitation:
(a) Property Insurance. Insurance on all property of a
character usually insured by organizations engaged in the same or
similar type of business as Borrower against all risks, casualties,
and losses through extended coverage or otherwise and of the kind
customarily insured against by such organizations;
(b) Liability Insurance. Public liability insurance
against tort claims which may be asserted against Borrower; and
(c) Additional Insurance. Such other insurance as may be
required by law.
6.15 Additional Guarantors. If at any time or from time to time
Borrower shall, directly or indirectly, acquire any Subsidiary which is a
Significant Subsidiary; or if any existing Subsidiary shall become a
Significant Subsidiary, then, at such time, Borrower shall cause such
Subsidiary (a) to execute and deliver to Bank a guaranty of the Obligations, in
form satisfactory to Bank, together with a certified copy of a resolution of
such Subsidiary's board of directors, satisfactory in form to Bank, authorizing
its guaranty; and such Subsidiary shall thereafter be deemed an "Additional
Guarantor" under this Agreement.
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ARTICLE 7
EVENTS AND CONSEQUENCES OF DEFAULT
7.1 Events of Default. Any of the following events shall, at the
option of Bank and at any time without regard to any previous knowledge on the
part of Bank, constitute a default by Borrower under the terms of this
Agreement, the L/C Agreements, and all other Loan Documents ("Default"):
(a) Nonpayment. Any payment or reimbursement due or
demanded under this Agreement or any Loan Document is not made within
five days of the date when due;
(b) Breach of Warranty. Any representation or warranty
made in connection with this Agreement or any other Loan Document, or
any certificate, notice, or report furnished pursuant hereto, is
determined by Bank to be false in any respect when made, and is relied
upon by Bank to its detriment;
(c) ERISA. Borrower shall engage in any act or omission
which would make Borrower liable under ERISA to the Plan, to any of
its participants, or to the Internal Revenue Service, if such
liability would materially adversely affect Borrower's financial
condition;
(d) Failure to Perform. Any other term, covenant, or
agreement contained in any Loan Document is not performed or
satisfied, and, if remediable, such failure continues unremedied for
30 days after written notice thereof has been given to Borrower by
Bank;
(e) Defaults on Other Obligations. There exists a
default in the performance of any other agreement or obligation for
the payment of borrowed money, for the deferred purchase price of
property or services, or for the payment of rent under any lease,
whether by acceleration or otherwise, which would permit such
obligation to be declared due and payable prior to its stated
maturity; and such default continues for 30 days after Borrower
receives written notice thereof from the creditor so affected;
(f) Guaranties. Any guarantor of all or any portion of
the Obligations revokes or attempts to revoke such guaranty, whether
with respect to future transactions or outstanding Obligations, or
otherwise breaches the terms and conditions of such guaranty;
(g) Loss, Destruction, or Condemnation of Property. A
portion of Borrower's property is affected by any uninsured loss,
damage, destruction, theft, sale, or encumbrance other than created
herein or is
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17
condemned, seized, or appropriated, the effect of which materially
impairs Borrower's financial condition or its ability to pay its debts
as they come due;
(h) Attachment Proceedings and Insolvency. Borrower or
any of Borrower's property is affected by any:
(i) Judgment lien, execution, attachment,
garnishment, general assignment for the benefit of creditors,
sequestration, or forfeiture, to the extent Borrower's
financial condition or its ability to pay its debts as they
come due is thereby materially impaired; or
(ii) Proceeding under the laws of any jurisdiction
relating to receivership, insolvency, or bankruptcy, whether
brought voluntarily or involuntarily by or against Borrower,
including, without limitation, any reorganization of assets,
deferment or arrangement of debts, or any similar proceeding,
and, if such proceeding is involuntarily brought against
Borrower, it is not dismissed within 60 days;
(i) Judgments. Final judgment on claims not covered by
insurance which, together with other outstanding final judgments
against Borrower, exceeds $1,000,000, is rendered against Borrower and
is not discharged, vacated, or reversed, or its execution stayed
pending appeal, within 60 days after entry, or is not discharged
within 60 days after the expiration of such stay; or
(j) Government Approvals. Any governmental approval,
registration, or filing with any governmental authority, now or later
required in connection with the performance by Borrower of its
obligations under the Loan Documents, is revoked, withdrawn, or
withheld, or fails to remain in full force and effect, except Borrower
shall have 60 days after notice of any such event to take whatever
action is necessary to obtain all necessary approvals, registrations,
and filings.
7.2 Remedies Upon Default. If any Default occurs and is
continuing, Bank may at its option, by notice to Borrower:
(a) Terminate Commitments. Terminate Bank's commitment
to issue new Letters of Credit;
(b) Suspend Commitments. Refuse to issue new Letters of
Credit until any Default has been cured;
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(c) Setoff. Exercise its right of setoff against any
cash collateral pledged to Bank or any other deposit accounts of
Borrower with Bank; and/or
(d) All Remedies. Pursue any other available legal and
equitable remedies.
All of Bank's rights and remedies in all Loan Documents shall be cumulative and
can be exercised separately or concurrently.
7.3 Alleged Default by Bank. In the event that Borrower at any
time concludes that Bank has defaulted in any respect under this Agreement or
any of the Loan Documents, Borrower shall promptly give notice thereof to Bank
and provide Bank with a period of not less than 30 days in which to cure such
alleged default; provided, however, that in no event shall this Section 7.3 or
the Borrower's giving such notice to Bank extend the time period(s) granted to
the Borrower to cure any Default under Section 7.1(d). Failure of the Borrower
to provide such notice to Bank shall waive the Borrower's right to assert a
claim against Bank for such alleged default.
ARTICLE 8
MISCELLANEOUS
8.1 Manner of Payments.
(a) Payments on Nonbusiness Days. Whenever any event is
to occur or any payment is to be made under any Loan Document on any
day other than a Business Day, such event may occur or such payment
may be made on the next succeeding Business Day and such extension of
time shall be included in computation of interest in connection with
any such payment.
(b) Payments. All payments and prepayments to be made by
Borrower shall be made to Bank when due, at Bank's office as may be
designated by Bank, without offsets or counterclaims for any amounts
claimed by Borrower to be due from Bank, in U.S. dollars and in
immediately available funds.
(c) Application of Payments. All payments made by
Borrower shall be applied first against fees, expenses, and
indemnities due; second, against interest due; and third, against
principal, with Bank having the right, after a Default which is
continuing, to apply any payments or collections received against any
one or more of the Obligations in any manner which Bank may choose.
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19
(d) Recording of Payments. Bank is authorized to record
on a schedule or computer-generated statement the date and amount of
each draw under a Letter of Credit, and all payments of principal and
interest. All such schedules or statements shall constitute prima
facie evidence of the accuracy of the information so recorded.
8.2 Notices. All notices, demands, and other communications to be
given pursuant to any of the Loan Documents shall be in writing and shall be
deemed received the earlier of when actually received, or two days after being
mailed, postage prepaid and addressed as follows, or as later designated in
writing:
BANK: BORROWER:
SEATTLE-FIRST NATIONAL BANK COEUR D'ALENE MINES CORPORATION
Eastern Commercial Banking 400 Coeur d'Alene Mines Building
West 601 Riverside Avenue 505 Front Avenue, P.O. Box I
Spokane, WA 99210 Coeur d'Alene, Idaho 83814
Attention: Kurt L. Walsdorf Attention: James Sabala
8.3 Documentation and Administration Expenses. Borrower shall
pay, reimburse, and indemnify Bank for all of Bank's reasonable costs and
expenses, including, without limitation, all accounting, appraisal, and report
preparation fees or expenses, all recording or filing fees, and all normal,
reasonable, and customary attorneys' fees (including the allocated cost of
in-house counsel) and legal expenses incurred in connection with the
negotiation, preparation, execution, and administration of this Agreement and
all other Loan Documents, and all amendments, supplements, or modifications
thereto, and the perfection of all security interests, liens, or encumbrances
that may be granted to Bank. Borrower acknowledges that any legal counsel
retained or employed by Bank acts solely on the Bank's behalf and not on
Borrower's behalf, despite Borrower's obligation to reimburse Bank for the cost
of such legal counsel, and that Borrower has had sufficient opportunity to seek
the advice of its own legal counsel with regard to this Agreement.
8.4 Collection Expenses. The nonprevailing party shall, upon
demand by the prevailing party, reimburse the prevailing party for all of its
costs, expenses, and reasonable attorneys' fees (including the allocated cost
of in-house counsel) incurred in connection with any controversy or claim
between said parties relating to this Agreement or any of the other Loan
Documents, or to an alleged tort arising out of the transactions evidenced by
this Agreement, including those incurred in any action, bankruptcy proceeding,
arbitration or
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20
other alternative dispute resolution proceeding, or appeal, or in the course of
exercising any judicial or nonjudicial remedies.
8.5 Waiver. No failure to exercise and no delay in exercising,
on the part of Bank, any right, power, or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege hereunder preclude any other or further exercise thereof, or the
exercise of any other right, power, or privilege. Further, no waiver or
indulgence by Bank of any Default shall constitute a waiver of Bank's right to
declare a subsequent similar failure or event to be a Default.
8.6 Assignment. This Agreement is made expressly for the sole
benefit of Borrower and for the protection of Bank and its successors and
assigns. The rights of Borrower hereunder shall not be assignable by operation
of law or otherwise, without the prior written consent of Bank.
8.7 Merger. The rights and obligations set forth in this
Agreement shall not merge into or be extinguished by any of the Loan Documents,
but shall continue and remain valid and enforceable. This Agreement and the
other Loan Documents constitute Bank's entire agreement with Borrower, and
supersede all prior writings and oral negotiations. No oral or written
representation, covenant, commitment, waiver, or promise of either Bank or
Borrower shall have any effect, whether made before or after the date of this
Agreement, unless contained in this Agreement or another Loan Document, or in
an amendment complying with Section 8.8. ORAL AGREEMENTS OR ORAL COMMITMENTS
TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A
DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
8.8 Amendments. Any amendment or waiver of, or consent to any
departure by Borrower from any provision of, this Agreement shall be in writing
signed by each party to be bound thereby, and shall be effective only in the
specific instance and for the specific purpose for which given.
8.9 Mandatory Arbitration.
(a) At the request of either Bank or Borrower, any
controversy or claim between Bank and Borrower, arising from or
relating to this Agreement or any of the other Loan Documents, or
arising from an alleged tort, shall be settled by arbitration in
Seattle, Washington. The United States Arbitration Act shall apply
even though this Agreement is otherwise governed by Washington law.
The proceedings shall be administered by the American Arbitration
Association under its commercial rules of arbitration. Any
controversy over whether an issue is arbitrable shall be
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21
determined by the arbitrator(s). Judgment upon the arbitration award
may be entered in any court having jurisdiction over the parties. The
institution and maintenance of an action for judicial relief or
pursuit of an ancillary or provisional remedy shall not constitute a
waiver of the right of either party, including the plaintiff, to
submit the controversy or claim to arbitration if such action for
judicial relief is contested. For purposes of the application of the
statute of limitations, the filing of an arbitration pursuant to this
subsection is the equivalent of the filing of a lawsuit, and any claim
or controversy which may be arbitrated under this subsection is
subject to any applicable statute of limitations. The arbitrator(s)
will have the authority to decide whether any such claim or
controversy is barred by the statute of limitations and, if so, to
dismiss the arbitration on that basis. The parties consent to the
joinder of any guarantor, hypothecator, or other party having an
interest relating to the claim or controversy being arbitrated in any
proceedings under this Section.
(b) Notwithstanding the provisions of subsection 8.9(a),
no controversy or claim shall be submitted to arbitration without the
consent of all parties if at the time of the proposed submission, such
controversy or claim arises from or relates to an obligation secured
by real property.
(c) No provision of this subsection shall limit the right
of Borrower or Bank to exercise self-help remedies such as set-off,
foreclosure, retention or sale of any collateral, or obtaining any
ancillary, provisional, or interim remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration
proceeding. The exercise of any such remedy does not waive the right
of either party to request arbitration.
8.10 Construction. Each term of this Agreement and each Loan
Document shall be binding to the extent permitted by law and shall be governed
by the laws of the State of Washington, excluding its conflict of laws rules.
If one or more of the provisions of this Agreement should be invalid, illegal,
or unenforceable in any respect, the remaining provisions of this Agreement
shall remain effective and enforceable. If there is a conflict among the
provisions of any Loan Documents, the provisions of this Agreement shall be
controlling. The captions and organization of this Agreement are for
convenience only, and shall not be construed to affect any provision of this
Agreement.
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22
8.11 Termination of Agreement. All obligations of Borrower under
this Agreement shall remain in full force and effect until (a) no Letters of
Credit remain outstanding, (b) all Obligations have been paid in full and (c)
Bank has no further obligation to issue Letters of Credit; at which time all
obligations of both Bank and Borrower under this Agreement shall terminate, and
all security interests held by Bank shall be deemed released. Bank shall at
such time, upon demand by Borrower, execute all documents of release or
satisfaction necessary to clear title to any collateral.
DATED this 8th day of June 1994.
BORROWER: BANK:
COEUR D'ALENE MINES CORPORATION SEATTLE-FIRST NATIONAL BANK
By /s/ JAMES A. SABALA By [sig]
--------------------------- -----------------------------
Title Sr. Vice President Title Vice President
------------------------ --------------------------
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23
EXHIBIT A TO CREDIT AGREEMENT
[Form of Certificate to be sent with financial reports]
[Date]
Seattle-First National Bank
Eastern Commercial Banking
West 601 Riverside Avenue
Spokane, WA 99210
Attention: Kurt L. Walsdorf
Re: Certificate of Chief Financial Officer
Ladies and Gentlemen:
With respect to that certain Credit Agreement between Coeur d'Alene Mines
Corporation ("Borrower") and Seattle-First National Bank ("Bank") dated
_____________, 1994 (the "Agreement"), we hereby represent to you the following
(capitalized terms used in this certificate shall have the same meaning as in
the Agreement):
Enclosed are financial statements required by Section 6.6 of the Agreement. As
of the date of such financial statements:
1. Borrower's Tangible Net Worth is $__________________.
2. Borrower's ratio of Current Assets to Current Liabilities is
___________.
3. Borrower's ratio of Debt to Tangible Net Worth is _____________.
4. Borrower's Cash Equivalents are $__________________.
Such financial statements are complete and correct, fairly present, without
qualification, the financial condition of Borrower for such period, and are
prepared in accordance with GAAP;
No Default exists, nor any event which, with lapse of time or upon the giving
of notice would constitute a Default under the Agreement.
Sincerely,
COEUR D'ALENE MINES CORPORATION
By
---------------------------
Chief Financial Officer
24
COMMERCIAL GUARANTY
Borrower: COEUR D'ALENE MINES CORPORATION Lender: SEATTLE-FIRST NATIONAL BANK
P.O. BOX 1 EASTERN COMMERCIAL TEAM 1/SPOKANE 56
COEUR D'ALENE, ID 83814 C/O CLSC-E (DOC'S)
P.O. BOX 1446 (SFC-5)
SPOKANE, WA 99210-1630
Guarantor: COEUR GOLD NEW ZEALAND, LIMITED
400 COEUR D'ALENE MINES BLDG, 505 FRONT STREET
COEUR D'ALENE, ID 83814
AMOUNT OF GUARANTY. THE AMOUNT OF THIS GUARANTY IS UNLIMITED.
CONTINUING UNLIMITED GUARANTY. FOR GOOD AND VALUABLE CONSIDERATION, COEUR GOLD
NEW ZEALAND, LIMITED ("GUARANTOR") ABSOLUTELY AND UNCONDITIONALLY GUARANTEES
AND PROMISES TO PAY TO SEATTLE-FIRST NATIONAL BANK ("LENDER") OR ITS ORDER, IN
LEGAL TENDER OF THE UNITED STATES OF AMERICA, THE INDEBTEDNESS (AS THAT TERM IS
DEFINED BELOW) OF COEUR D'ALENE MINES CORPORATION ("BORROWER") TO LENDER ON THE
TERMS AND CONDITIONS SET FORTH IN THIS GUARANTY. UNDER THIS GUARANTY, THE
LIABILITY OF GUARANTOR IS UNLIMITED AND THE OBLIGATIONS OF GUARANTOR ARE
CONTINUING.
DEFINITIONS. The following words shall have the following meanings when used
in this Guaranty:
BORROWER. The word "Borrower" means COEUR D'ALENE MINES CORPORATION.
GUARANTOR. The word "Guarantor" means COEUR GOLD NEW ZEALAND, LIMITED.
GUARANTY. The word "Guaranty" means this Guaranty between Guarantor
and Lender dated June 2,1994.
INDEBTEDNESS. The word "Indebtedness" means all of Borrower's
indebtedness to Lender in its most comprehensive sense and includes
without limitation all indebtedness, whether now or hereafter
existing, whether arising from loan advances, interest, debts, lease
obligations, other obligations, or liabilities of Borrower, or any of
them, including judgments against Borrower, heretofore, now, or
hereafter made, incurred, or created; whether voluntarily or
involuntarily and however arising; whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined;
whether Borrower may be liable individually or jointly with others, or
primarily or secondarily, or as guarantor or surety; whether recovery
upon such indebtedness may be or hereafter may become barred by any
statute of limitations; and whether such indebtedness may be or
hereafter may become otherwise unenforceable, and whether such
indebtedness arises from transactions which may be voidable on account
of infancy, insanity, ultra vires, or otherwise.
LENDER. The word "Lender" means SEATTLE-FIRST NATIONAL BANK, its
successors and assigns.
NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open
and continuous for so long as this Guaranty remains in force. Guarantor
intends to guarantee at all times the performance and prompt payment when due,
whether at maturity or earlier by reason of acceleration or otherwise, of all
Indebtedness. Accordingly, no payments made upon the Indebtedness will
discharge or diminish the continuing liability of Guarantor in connection with
any remaining portions of the Indebtedness or any of the Indebtedness which
subsequently arises or is thereafter incurred or contracted.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor
or to Borrower, and will continue in full force until such time as Guarantor
notifies Lender in writing of Guarantor's election to revoke this Guaranty.
Guarantors written notice of revocation must be delivered to Lender at the
address of Lender listed above or such other place as Lender may designate in
writing. Written revocation of this Guaranty will apply only to advances or
new Indebtedness created after actual receipt by Lender of Guarantors written
revocation. This Guaranty will continue to bind Guarantor for all Indebtedness
incurred by Borrower or committed by Lender prior to receipt of Guarantors
written notice of revocation, including any extension, renewal, or modification
of the Indebtedness. If Lender has extended credit to Borrower in the form of
one or more credit card accounts, Guarantor's promise with respect to
Borrower's Indebtedness under these accounts shall remain effective until
Lender actually receives at its Bankcard Services both of the following: (a)
written notice that Guarantor withdraws Guarantor's promise with respect to
credit card Indebtedness and (b) all cards issued under these credit card
accounts. Any renewals, extensions, and modifications of the Indebtedness
which are granted after Guarantors revocation are contemplated under this
Guaranty and specifically will not be considered new Indebtedness. This
Guaranty shall bind the estate of Guarantor as to Indebtedness created both
before and after the death or incapacity of Guarantor, regardless of Lender's
actual notice of Guarantor's death. Subject to the foregoing, Guarantor's
executor or administrator or other legal representative may terminate this
Guaranty in the same manner in which Guarantor might have terminated it and
with the same effect. Release of any other guarantor or termination of any
other guaranty of the Indebtedness shall not affect the liability of Guarantor
under this Guaranty. A revocation received by Lender from any one or more
Guarantors shall not affect the liability of any remaining Guarantors under
this Guaranty. IT IS ANTICIPATED THAT FLUCTUATIONS MAY OCCUR IN THE AGGREGATE
AMOUNT OF INDEBTEDNESS COVERED BY THIS GUARANTY, AND IT IS SPECIFICALLY
ACKNOWLEDGED AND AGREED BY GUARANTOR THAT REDUCTIONS IN THE AMOUNT OF
INDEBTEDNESS, EVEN TO ZERO DOLLARS ($0.00), PRIOR TO WRITTEN REVOCATION OF THIS
GUARANTY BY GUARANTOR SHALL NOT CONSTITUTE A TERMINATION OF THIS GUARANTY.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either
before or after any revocation hereof, WITHOUT NOTICE OR DEMAND AND WITHOUT
LESSENING GUARANTOR'S LIABILITY UNDER THIS GUARANTY, FROM TIME TO TIME: (A)
PRIOR TO REVOCATION AS SET FORTH ABOVE, TO MAKE ONE OR MORE ADDITIONAL SECURED
OR UNSECURED LOANS TO BORROWER, TO LEASE EQUIPMENT OR OTHER GOODS TO BORROWER,
OR OTHERWISE TO EXTEND ADDITIONAL CREDIT TO BORROWER; (B) TO ALTER, COMPROMISE,
RENEW, EXTEND, ACCELERATE, OR OTHERWISE CHANGE ONE OR MORE TIMES THE TIME FOR
PAYMENT OR OTHER TERMS OF THE INDEBTEDNESS OR ANY PART OF THE INDEBTEDNESS,
INCLUDING INCREASES AND DECREASES OF THE RATE OF INTEREST ON THE INDEBTEDNESS;
EXTENSIONS MAY BE REPEATED AND MAY BE FOR LONGER THAN THE ORIGINAL LOAN TERM;
(C) TO TAKE AND HOLD SECURITY FOR THE PAYMENT OF THIS GUARANTY OR THE
INDEBTEDNESS, AND EXCHANGE, ENFORCE, WAIVE, FALL OR DECIDE NOT TO PERFECT, AND
RELEASE ANY SUCH SECURITY, WITH OR WITHOUT THE SUBSTITUTION OF NEW COLLATERAL;
(D) TO RELEASE, SUBSTITUTE, AGREE NOT TO SUE, OR DEAL WITH ANY ONE OR MORE OF
BORROWER'S SURETIES, ENDORSERS, OR OTHER GUARANTORS ON ANY TERMS OR IN ANY
MANNER LENDER MAY CHOOSE; (E) TO DETERMINE HOW, WHEN AND WHAT APPLICATION OF
PAYMENTS AND CREDITS SHALL BE MADE ON THE INDEBTEDNESS; (F) TO APPLY SUCH
SECURITY AND DIRECT THE ORDER OR MANNER OF SALE THEREOF, INCLUDING WITHOUT
LIMITATION, ANY NONJUDICIAL SALE PERMITTED BY THE TERMS OF THE CONTROLLING
SECURITY AGREEMENT OR DEED OF TRUST, AS LENDER IN ITS DISCRETION MAY DETERMINE;
(G) TO SELL, TRANSFER, ASSIGN, OR GRANT PARTICIPATIONS IN ALL OR ANY PART OF
THE INDEBTEDNESS; AND (H) TO ASSIGN OR TRANSFER THIS GUARANTY IN WHOLE OR IN
PART.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants
to Lender that (a) no representations or agreements of any kind have been made
to Guarantor which would limit or qualify in any way the terms of this
Guaranty; (b) this Guaranty is executed at Borrower's request and not at the
request of Lender; (c) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate,
transfer, or otherwise dispose of all or substantially all of Guarantor's
assets, or any interest therein; (d) Lender has made no representation to
Guarantor as to the creditworthiness of Borrower; (e) upon Lender's request,
Guarantor will provide to Lender financial and credit
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COMMERCIAL GUARANTY PAGE 2
(CONTINUED)
information in form acceptable to Lender, and all such financial information
provided to Lender is true and correct in all material respects and fairly
presents the financial condition of Guarantor as of the dates thereof, and no
material adverse change has occurred in the financial condition of Guarantor
since the date of the financial statements and (f) Guarantor has established
adequate means of obtaining from Borrower on a continuing basis information
regarding Borrower's financial condition. Guarantor agrees to keep adequately
informed from such means of any facts, events, or circumstances which might in
any way affect Guarantor's risks under this Guaranty, and Guarantor further
agrees that, absent a request for information, Lender shall have no obligation
to disclose to Guarantor any information or documents acquired by Lender in the
course of its relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (e) to pursue
any other remedy within Lender's power; or (f) to commit any act or omission of
any kind, or at any time, with respect to any matter whatsoever.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower,
by subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b)
any election of remedies by Lender which destroys or otherwise adversely
affects Guarantor's subrogation rights or Guarantor's rights to proceed against
Borrower for reimbursement, including without limitation, any loss of rights
Guarantor may suffer by reason of any law limiting, qualifying, or discharging
the Indebtedness; (c) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal
tender, of the Indebtedness; (d) any right to claim discharge of the
Indebtedness on the basis of unjustified impairment of any collateral for the
Indebtedness; (e) any statute of limitations, if at any time any action or suit
brought by Lender against Guarantor is commenced there is outstanding
Indebtedness of Borrower to Lender which is not barred by any applicable
statute of limitations; or (f) any defenses given to guarantors at law or in
equity other than actual payment and performance of the Indebtedness. If
payment is made by Borrower, whether voluntarily or otherwise, or by any third
party, on the Indebtedness and thereafter Lender is forced to remit the amount
of that payment to Borrower's trustee in bankruptcy or to any similar person
under any federal or state bankruptcy law or law for the relief of debtors, the
Indebtedness shall be considered unpaid for the purpose of enforcement of this
Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether such
claim, demand or right may be asserted by the Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by
law or public policy.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets
of Borrower, through bankruptcy, by an assignment for the benefit of creditors,
by voluntary liquidation, or otherwise, the assets of Borrower applicable to
the payment of the claims of both Lender and Guarantor shall be paid to Lender
and shall be first applied by Lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower lo Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions
as Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty,
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
AMENDMENTS. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Guaranty. No alteration of or
amendment to this Guaranty shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by
the alteration or amendment.
APPLICABLE LAW. This Guaranty has been delivered to Lender and
accepted by Lender in the State of Washington. If there is a lawsuit,
Guarantor agrees upon Lender's request to submit to the jurisdiction
of the courts situated in King County, State of Washington. This
Guaranty shall governed by and construed in accordance with the laws
of the State of Washington.
ATTORNEYS' FEES; EXPENSES. Guarantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this
Guaranty. Lender may pay someone else to help enforce this Guaranty,
and Guarantor shall pay the costs and expenses of such enforcement.
Costs and expenses include Lender's attorneys' fees and legal
expenses whether or not there is a lawsuit, including attorneys' fees
and legal expenses for bankruptcy proceedings (and including efforts
to modify or vacate any automatic stay or injunction), appeals, and
any anticipated post-judgment collection services. Guarantor also
shall pay all court costs and such additional fees as may be directed
by the court.
NOTICES. Except for revocation notices by Guarantor, all notices
required to be given by either party to the other under this Guaranty
shall be in writing and shall be effective when actually delivered or
when deposited in the United States mail, first class postage prepaid,
addressed to the party to whom the notice is to be given at the
address shown above or to such other addresses as either party may
designate to the other in writing. All revocation notices by
Guarantor shall be in writing and shall be effective only upon deliver
to Lender as provided above in the section titled "DURATION OF
GUARANTY." If there is more than one Guarantor, notice to any
Guarantor will constitute notice to all Guarantors. For
notice purposes, Guarantor agrees to keep Lender informed at all times
of Guarantor's current address.
INTERPRETATION. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall
be deemed to have been used in the plural where the context and
construction so require; and where there is more than one Borrower
named in this
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COMMERCIAL GUARANTY PAGE 3
(CONTINUED)
Guaranty or when this Guaranty is executed by more than one Guarantor,
the words "Borrower" and "Guarantor" respectively shall mean all and
any one or more of them. The words "Guarantor," "Borrower," and
"Lender" include the heirs, successors, assigns, and transferees of
each of them. Caption headings in this Guaranty are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Guaranty. If a court of competent jurisdiction
finds any provision of this Guaranty to be invalid or unenforceable as
to any person or circumstance, such finding shall not render that
provision invalid or unenforceable as to any other persons or
circumstances, and all provisions of this Guaranty in all other
respects shall remain valid and enforceable. It any one or more of
Borrower or Guarantor are corporations or partnerships, it is not
necessary for Lender to inquire into the powers of Borrower or
Guarantor or of the officers, directors, partners, or agents acting or
purporting to act on their behalf, and any Indebtedness made or
created in reliance upon the professed exercise of such powers shall
be guaranteed under this Guaranty.
WAIVER. Lender shall not be deemed to have waived any rights under
this Guaranty unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Guaranty shall not prejudice
or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Guaranty. No prior waiver by Lender, nor any course of dealing
between Lender and Guarantor, shall constitute a waiver of any of
Lender's rights or of any of Guarantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Guaranty, the granting of such consent by Lender in any instance shall
not constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS
OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND
DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL
TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY."
NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.
THIS GUARANTY IS DATED JUNE 2, 1994.
GUARANTOR:
COEUR GOLD NEW ZEALAND, LIMITED
By: /s/ JAMES A. SABALA By:
--------------------- ------------------------------
Authorized Signer Authorized Signer
27
SECRETARY'S CERTIFICATE
The undersigned, Secretary of Coeur d'Alene Mines Corporation, Coeur
Alaska, Inc. , CDE Chilean Mining Corporation, Callahan Mining Corporation,
Coeur Gold New Zealand Limited, Coeur New Zealand, Inc. and Coeur Rochester,
Inc., hereby certifies that the Resolutions set forth below were duly adopted
at a regular meeting of the Board of Directors of Coeur d'Alene Mines
Corporation held on December 14, 1993:
RESOLVED, that Coeur d'Alene Mines Corporation and its subsidiaries' 1994
Budget presented to the Board at this meeting is hereby approved and adopted,
it being understood that said Budget specifically includes the lease financing
of certain equipment for use at the Rochester Mine.
FURTHER RESOLVED that the appropriate officers of Coeur d'Alene Mines
Corporation and its subsidiaries are authorized to take all steps, and to
execute all documents, including contracts, guarantees, bank and financial
institution agreements and authorizations, permits, deeds and any other
instruments which may be necessary to carry out the business of the company and
its subsidiaries as contemplated by the 1994 Budget; and such officers shall
have the authority to effect transactions that do not materially depart from
such Budget.
FURTHER RESOLVED that the Chairman, Chief Executive Officer and President,
the Senior Vice President-Chief Financial Officer, the Senior Vice
President-Operations, and the Secretary of the company and its subsidiaries are
hereby authorized to, severally or jointly as is appropriate to their customary
duties and the transactions involved, provide certificates to third parties as
evidence of the authorization by the Board to carry out the business and
affairs of Coeur d'Alene Mines Corporation and its subsidiaries as provided in
these Resolutions, which certificates may include a representation that the
particular transaction is contemplated by the 1994 Budget, and therefore
authorized by the Board, it being understood that third parties may rely upon
such certificate.
It is further certified that the Letters of Credit which are the subject
of that certain Credit Agreement between Coeur d'Alene Mines Corporation and
Seattle-First National Bank dated June 8, 1994, are contemplated by the 1994
Budget referred to in the foregoing resolutions, and that James A. Sabala is
the Senior Vice President - Chief Financial Officer of Coeur d'Alene Mines
Corporation and the Vice President of each of the subsidiaries listed above,
and is the officer who, as a part of his customary duties, executes bank credit
agreements and guaranties on behalf of Coeur d'Alene Mines Corporation and its
subsidiaries listed above.
It is further certified that the signature of James A. Sabala which
appears hereon is his true and accurate signature.
/s/ JAMES A. SABALA
-----------------------
28
DATED this 8th day of June, 1994
/s/ WILLIAM F. BOYD
--------------------------------
William F. Boyd, Secretary
29
DISCLOSURE OF LITIGATION
Pursuant to Paragraph 5.6 of that certain Credit Agreement between Coeur
d'Alene Mines Corporation and Seattle-First National Bank dated June 8, 1994,
Coeur d'Alene Mines Corporation hereby discloses certain litigation, as
follows:
1. Kassover suit, where a settlement of $5,875,000 has been
agreed upon, subject to Court approval. (See page 18 of the
1993 Form 10-K)
2. Callahan suit, where FN Enterprises claims it is due
approximately $900,000 (if interest is included) from Callahan
Mining Corporation for breach of contract. (See page 18 of the
1993 Form 10-K.)
3. Promissory note suit, where an estate seeks approximately
$1,000,000 (if interest is included) from Coeur d'Alene Mines
Corporation in connection with notes claimed to be owed. (See
page 19 of the 1993 Form 10-K.)
4. Bunker Hill superfund site, where a settlement has been agreed
upon, subject to Court approval, in the amount of $1,230,000.
(See page 16 of the 1993 Form 10-K.)
Dated this 8th day of June, 1994
/s/ WILLIAM F. BOYD
--------------------------------
William F. Boyd, Secretary